Company to Host Quarterly Conference Call at 9:00 A.M. on August 9,
2017
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--
United Insurance Holdings Corp. (NASDAQ:UIHC)(UPC Insurance or
the Company), a property and casualty insurance holding company, today
reported its financial results for the second quarter ended June 30,
2017.
|
|
|
| |
| |
|
($ in thousands, except per share)
| | | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | | 2017 |
| 2016 |
| Change | | 2017 |
| 2016 |
| Change |
|
Gross premiums written
| | | |
$
|
352,347
| | |
$
|
210,756
| | |
67.2
|
%
| |
$
|
521,189
| | |
$
|
346,712
| | |
50.3
|
%
|
|
Gross premiums earned
| | | |
$
|
261,584
| | |
$
|
164,585
| | |
58.9
|
%
| |
$
|
443,649
| | |
$
|
311,087
| | |
42.6
|
%
|
|
Net premiums earned
| | | |
$
|
159,618
| | |
$
|
114,179
| | |
39.8
|
%
| |
$
|
266,801
| | |
$
|
215,549
| | |
23.8
|
%
|
|
Total revenues
| | | |
$
|
178,073
| | |
$
|
120,921
| | |
47.3
|
%
| |
$
|
300,706
| | |
$
|
228,482
| | |
31.6
|
%
|
|
Earnings before income tax
| | | |
$
|
12,650
| | |
$
|
15,210
| | |
(16.8
|
)%
| |
$
|
18,588
| | |
$
|
19,540
| | |
(4.9
|
)%
|
|
Net income
| | | |
$
|
7,257
| | |
$
|
9,841
| | |
(26.3
|
)%
| |
$
|
11,156
| | |
$
|
12,792
| | |
(12.8
|
)%
|
|
Net income per diluted share
| | | |
$
|
0.17
| | |
$
|
0.45
| | |
(62.2
|
)%
| |
$
|
0.35
| | |
$
|
0.59
| | |
(40.7
|
)%
|
| | | | | | | | | | | | | |
|
|
Reconciliation of net income to operating income:
| | | | | | | | | | | | | | |
|
Plus: Merger expenses, net of tax
| | | |
$
|
4,383
| | |
$
|
399
| | |
998.5
|
%
| |
$
|
4,481
| | |
$
|
447
| | |
902.5
|
%
|
|
Plus: Non-cash amortization of intangible assets, net of tax
| | | |
$
|
7,407
| | |
$
|
2,261
| | |
227.6
|
%
| |
$
|
8,573
| | |
$
|
2,710
| | |
216.3
|
%
|
|
Less: Realized gains (losses), net of tax
| | | |
$
|
(86
|
)
| |
$
|
66
| | |
(230.3
|
)%
| |
$
|
(314
|
)
| |
$
|
242
| | |
(229.8
|
)%
|
|
Operating income
| | | |
$
|
19,133
| | |
$
|
12,435
| | |
53.9
|
%
| |
$
|
24,524
| | |
$
|
15,707
| | |
56.1
|
%
|
|
Operating income per diluted share
| | | |
$
|
0.46
| | |
$
|
0.57
| | |
(19.3
|
)%
| |
$
|
0.77
| | |
$
|
0.73
| | |
5.5
|
%
|
| | | | | | | | | | | | | |
|
|
Book value per share
| | | | | | | | | |
$
|
12.39
| | |
$
|
11.97
| | |
3.5
|
%
|
| | | | | | | | | | | | | | | | | | |
|
"This was our first quarter of operations as a combined company with
AmCo, and we are already seeing some of the scale and diversification
benefits we expected from the merger," said John Forney, President & CEO
of UPC Insurance. "Our team is working hard to make sure we realize all
the upside inherent in this combination in the coming months and years."
Operating Return on Equity
Operating Return on Equity (see calculation below) is a ratio we
calculate using non-GAAP measures. It is calculated by dividing the
operating income for the most recent twelve months by the average
shareholders’ equity for the most recent twelve months. Operating income
is an after-tax non-GAAP measure that we calculate by excluding the
effect of non-cash amortization of intangible assets, non-recurring
expenses such as merger-related professional fees, and realized gains or
losses on our investment portfolio from net income. In the opinion of
the Company’s management, operating income, operating income per share
and operating return on equity are meaningful indicators of our
underwriting and operating results, since the excluded items are not
necessarily indicative of operating trends. Internally, the Company’s
management uses operating income, operating income per share and
operating return on equity to evaluate performance against historical
results and establish financial targets on a consolidated basis. The
following table reconciles operating return on equity to return on
equity, the most directly comparable GAAP measure.
|
|
|
| |
| |
|
($ in thousands)
| | | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Net income
| | | |
$
|
7,257
| | |
$
|
9,841
| | |
$
|
11,156
| | |
$
|
12,792
| |
|
Return on equity based on GAAP net income (1) | | | |
9.1
|
%
| |
16.4
|
%
| |
7.0
|
%
| |
10.7
|
%
|
| | | | | | | | | |
|
|
Operating income
| | | |
$
|
19,133
| | |
$
|
12,435
| | |
$
|
24,524
| | |
$
|
15,707
| |
|
Operating return on equity (1) | | | |
24.1
|
%
| |
20.7
|
%
| |
15.4
|
%
| |
13.1
|
%
|
| (1) |
|
Return on equity is calculated on an annualized basis.
|
| |
|
The calculation of the Company's underlying combined loss ratios are
shown below.
|
|
|
| |
| |
|
($ in thousands, except per share)
| | | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | | 2017 |
| 2016 |
| Change | | 2017 |
| 2016 |
| Change |
|
Loss ratio, net(1) | | | |
54.5
|
%
| |
54.8
|
%
| |
(0.3
|
) pts
| |
56.3
|
%
| |
58.9
|
%
| |
(2.6
|
) pts
|
|
Expense ratio, net(2) | | | |
48.7
|
%
| |
37.7
|
%
| |
11.0
|
pts
| |
48.9
|
%
| |
38.0
|
%
| |
10.9
|
pts
|
|
Combined ratio (CR)(3) | | | |
103.2
|
%
| |
92.5
|
%
| |
10.7
|
pts
| |
105.2
|
%
| |
96.9
|
%
| |
8.3
|
pts
|
|
Effect of current year catastrophe losses on CR
| | | |
13.7
|
%
| |
3.3
|
%
| |
10.4
|
pts
| |
12.1
|
%
| |
8.7
|
%
| |
3.4
|
pts
|
|
Effect of prior year (favorable) development on CR
| | | |
(0.8
|
)%
| |
0.4
|
%
| |
(1.2
|
) pts
| |
(0.7
|
)%
| |
1.7
|
%
| |
(2.4
|
) pts
|
|
Effect of ceding commission income on CR
| | | |
6.6
|
%
| |
0.8
|
%
| |
5.8
|
pts
| |
7.5
|
%
| |
0.8
|
%
| |
6.7
|
pts
|
|
Underlying combined ratio(4)(5) | | | |
83.7
|
%
| |
88.0
|
%
| |
(4.3
|
) pts
| |
86.3
|
%
| |
85.7
|
%
| |
0.6
|
pts
|
| (1) |
|
Loss ratio, net is calculated as losses and loss adjustment expenses
(LAE) relative to net premiums earned.
|
| (2) | |
Expense ratio, net is calculated as the sum of all operating
expenses less interest expense relative to net premiums earned.
|
| (3) | |
Combined ratio is the sum of the loss ratio, net and expense ratio,
net.
|
| (4) | |
Underlying combined ratio, a measure that is not based on U.S.
generally accepted accounting principles (GAAP), is reconciled
above to the combined ratio, the most directly comparable GAAP
measure. Additional information regarding non-GAAP financial
measures presented in this press release can be found in the "Definitions
of Non-GAAP Measures" section, below.
|
| (5) | |
Included in both the expense ratio and the combined ratio is $18.1
million and $20.1 million for the three and six months ended June
30, 2017, respectively, and $4.1 million and $4.9 million for the
three and six months ended June 30, 2016, respectively, of merger
professional fees and amortization expense predominately associated
with the AmCo merger. Excluding these additional expenses, the
Company would have reported an underlying combined ratio of 72.3%
and 78.8% for the three and six months ended June 30, 2017,
respectively, and 84.4% and 83.4% for the three and six months ended
June 30, 2016, respectively.
|
| |
|
Quarterly Financial Results
Net income for the second quarter of 2017 was $7.3 million, or $0.17 per
diluted share, compared to net income of $9.8 million, or $0.45 per
diluted share for the second quarter of 2016. The decrease in net
earnings was primarily due to the increase in catastrophe losses for the
second quarter of 2017 compared to the second quarter of 2016.
The Company's total gross written premium increased by $141.6 million,
or 67.2%, to $352.3 million for the second quarter of 2017 from $210.8
million for the second quarter of 2016, primarily reflecting the
Company's merger with AmCo Holdings Company (AmCo) on April 3, 2017, as
well as organic growth in new and renewal business generated in the
Company's Gulf and Florida regions. The breakdown of the
quarter-over-quarter changes in both direct and assumed written premiums
by region and gross written premium by line of business are shown in the
table below.
|
|
|
| |
| |
| |
|
($ in thousands)
| | | | Three Months Ended
June 30, | | | | |
| | | | 2017 |
| 2016 | | Change | | Growth % |
| Direct Written and Assumed Premium by Region (1) | | | | | | | | | | |
| Florida | | | |
$
|
199,736
| |
$
|
110,381
| |
$
|
89,355
| |
81.0
|
%
|
|
Gulf
| | | |
56,622
| |
42,991
| |
13,631
| |
31.7
| |
|
Northeast
| | | |
40,842
| |
32,103
| |
8,739
| |
27.2
| |
|
Southeast
| | | |
25,088
| |
24,240
| |
848
| |
3.5
|
|
|
Total direct written premium by region
| | | |
322,288
| |
209,715
| |
112,573
| |
53.7
|
%
|
|
Assumed premium (2) | | | |
30,059
| |
1,041
| |
29,018
| |
2,787.5
|
|
|
Total gross written premium by region
| | | |
$
|
352,347
| |
$
|
210,756
| |
$
|
141,591
| |
67.2
|
%
|
| | | | | | | | | |
|
| Gross Written Premium by Line of Business | | | | | | | | | | |
|
Personal property
| | | |
$
|
235,132
| |
$
|
203,634
| |
$
|
31,498
| |
15.5
|
%
|
|
Commercial property
| | | |
117,215
| |
7,122
| |
110,093
| |
1,545.8
|
|
|
Total gross written premium by line of business
| | | |
$
|
352,347
| |
$
|
210,756
| |
$
|
141,591
| |
67.2
|
%
|
(1) |
|
Each region is comprised of the following states: Gulf includes
Hawaii, Louisiana and Texas, Northeast includes Connecticut,
Massachusetts, New Jersey, New York and Rhode Island, and Southeast
includes Georgia, North Carolina and South Carolina.
|
| (2) | |
Assumed premium written for 2017 includes commercial property
business assumed from an unaffiliated insurer and 2016 premium
assumed includes homeowners business from Citizens Property
Insurance Corporation and the Texas Windstorm Insurance Association.
|
| |
|
Loss and LAE increased by $24.3 million, or 38.9%, to $86.9 million for
the second quarter of 2017 from $62.6 million for the second quarter of
2016. Loss and LAE expense as a percentage of net earned premiums
decreased 0.3 points to 54.5% for the quarter, compared to 54.8% for the
same period last year. Excluding catastrophe losses and reserve
development, the Company's gross underlying loss and LAE ratio for the
quarter would have been 25.4%, a decrease of 10.1 points from 35.5%
during the second quarter of 2016.
Policy acquisition costs increased by $17.6 million, or 68.4%, to $43.3
million for the second quarter of 2017 from $25.7 million for the second
quarter of 2016. These costs vary directly with changes in gross
premiums earned and were generally consistent with the Company's growth
in premium production and higher average market commission rates outside
of Florida.
Operating expenses increased by $0.5 million, or 7.6%, to $6.3 million
for the second quarter of 2017 from $5.8 million for the second quarter
of 2016, primarily due to increased costs related to the Company's
ongoing growth.
General and administrative expenses increased by $16.7 million, or
145.1%, to $28.2 million for the second quarter of 2017 from $11.5
million for the second quarter of 2016, primarily due to non-recurring
merger expenses and amortization costs related to the merger with AmCo.
Combined Ratio Analysis
The calculation of the Company's underlying loss ratios is shown below.
|
|
|
| |
| |
|
($ in thousands)
| | | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | 2017 |
| 2016 |
| Change | | 2017 |
| 2016 |
| Change |
|
Loss and LAE
| | | |
$
|
86,938
| | |
$
|
62,611
| | |
$
|
24,327
| | |
$
|
150,271
| | |
$
|
126,869
| | |
$
|
23,402
| |
|
% of Gross earned premiums
| | | |
33.2
|
%
| |
38.0
|
%
| |
(4.8
|
) pts
| |
33.9
|
%
| |
40.8
|
%
| |
(6.9
|
) pts
|
|
% of Net earned premiums
| | | |
54.5
|
%
| |
54.8
|
%
| |
(0.3
|
) pts
| |
56.3
|
%
| |
58.9
|
%
| |
(2.6
|
) pts
|
|
Less:
| | | | | | | | | | | | | | |
|
Current year catastrophe losses
| | | |
$
|
21,798
| | |
$
|
3,720
| | |
$
|
18,078
| | |
$
|
32,410
| | |
$
|
18,776
| | |
$
|
13,634
| |
|
Prior year reserve (favorable) development
| | | |
(1,264
|
)
| |
490
|
| |
(1,754
|
)
| |
(1,790
|
)
| |
3,676
|
| |
(5,466
|
)
|
|
Underlying Loss and LAE (1) | | | |
$
|
66,404
| | |
$
|
58,401
| | |
$
|
8,003
| | |
$
|
119,651
| | |
$
|
104,417
| | |
$
|
15,234
| |
|
% of Gross earned premiums
| | | |
25.4
|
%
| |
35.5
|
%
| |
(10.1
|
) pts
| |
27.0
|
%
| |
33.6
|
%
| |
(6.6
|
) pts
|
|
% of Net earned premiums
| | | |
41.6
|
%
| |
51.1
|
%
| |
(9.5
|
) pts
| |
44.8
|
%
| |
48.5
|
%
| |
(3.7
|
) pts
|
(1) |
|
Underlying Loss and LAE is a non-GAAP financial measure and is
reconciled above to Net Loss and LAE, the most directly comparable
GAAP measure. Additional information regarding non-GAAP financial
measures presented can be found in this press release is in the "Definitions
of Non-GAAP Measures" section, below.
|
| |
|
The calculation of the Company's underlying expense ratios is shown
below.
|
|
|
| |
| |
|
($ in thousands)
| | | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | 2017 |
| 2016 |
| Change | | 2017 |
| 2016 |
| Change |
|
Policy acquisition costs
| | | |
$
|
43,320
| | |
$
|
25,721
| | |
$
|
17,599
| | |
$
|
78,756
| | |
$
|
52,753
| | |
$
|
26,003
| |
|
Operating and underwriting
| | | |
6,257
| | |
5,814
| | |
443
| | |
12,129
| | |
9,768
| | |
2,361
| |
|
General and administrative
| | | |
28,176
|
| |
11,497
|
| |
16,679
|
| |
39,509
|
| |
19,430
|
| |
20,079
|
|
|
Total Operating Expenses
| | | |
$
|
77,753
| | |
$
|
43,032
| | |
$
|
34,721
| | |
$
|
130,394
| | |
$
|
81,951
| | |
$
|
48,443
| |
|
% of Gross earned premiums
| | | |
29.7
|
%
| |
26.1
|
%
| |
3.6
|
pts
| |
29.4
|
%
| |
26.3
|
%
| |
3.1
|
pts
|
|
% of Net earned premiums
| | | |
48.7
|
%
| |
37.7
|
%
| |
11.0
|
pts
| |
48.9
|
%
| |
38.0
|
%
| |
10.9
|
pts
|
|
Less:
| | | | | | | | | | | | | | |
|
Ceding commission income
| | | |
$
|
10,562
| | |
$
|
946
| | |
$
|
9,616
| | |
$
|
20,094
| | |
$
|
1,765
| | |
$
|
18,329
| |
|
Merger expenses and amortization
| | | |
18,138
|
| |
4,092
|
| |
14,046
|
| |
20,083
|
| |
4,857
|
| |
15,226
|
|
|
Underlying Expense (1) | | | |
$
|
49,053
| | |
$
|
37,994
| | |
$
|
11,059
| | |
$
|
90,217
| | |
$
|
75,329
| | |
$
|
14,888
| |
|
% of Gross earned premiums
| | | |
18.8
|
%
| |
23.1
|
%
| |
(4.3
|
) pts
| |
20.3
|
%
| |
24.2
|
%
| |
(3.9
|
) pts
|
|
% of Net earned premiums
| | | |
30.7
|
%
| |
33.3
|
%
| |
(2.6
|
) pts
| |
33.8
|
%
| |
34.9
|
%
| |
(1.1
|
) pts
|
| (1) |
|
Underlying Expense is a non-GAAP financial measure and is
reconciled above to total operating expenses, the most directly
comparable GAAP measure. Additional information regarding non-GAAP
financial measures presented in this press release can be found in
the "Definitions of Non-GAAP Measures" section,
below.
|
| |
|
Reinsurance Costs as a % of Earned Premium
Excluding the Company's flood business, for which it cedes 100% of the
risk of loss, reinsurance costs in the second quarter of 2017 were 37.1%
of gross premiums earned compared to 27.8% of gross premiums earned for
the second quarter of 2016. Ceded earned premiums related to the
Company's quota share reinsurance program that launched on December 1,
2016 were $43.7 million or 8.0% of the 9.3% increase to reinsurance
costs as a percentage of gross premiums earned in the current quarter
compared to the second quarter last year. The remaining 1.3% increase is
related to our catastrophe reinsurance program.
Investment Portfolio Highlights
The Company's cash and investment holdings totaled $1.0 billion at
June 30, 2017 compared to $679.3 million at December 31, 2016. UPC
Insurance's cash and investment holdings consist of investments in U.S.
Government and agency securities, corporate debt and 100% investment
grade money market instruments. Fixed maturities represented
approximately 91.4% of total investments at June 30, 2017 with a
modified duration of 3.8 years compared to 93.5% at December 31, 2016
and a modified duration of 3.7 years.
Book Value Analysis
Book value per share increased 11.1% from $11.15 at December 31, 2016,
to $12.39 at June 30, 2017 and underlying book value per share increased
10.3% from $11.11 at December 31, 2016 to $12.25 at June 30, 2017. An
increase in the Company's retained earnings, along with an increase in
paid in capital as a result of the AmCo merger, drove the increase in
our book value per share and underlying book value per share. The
increase in accumulated other comprehensive income, as shown in the
table below, also impacted our underlying book value per share.
|
|
|
| |
| |
|
($ in thousands, except for per share data)
| | | | June 30, | | December 31, |
| | | | 2017 | | 2016 |
| Book Value per Share | | | | | | |
|
Numerator:
| | | | | | |
|
Common shareholders' equity
| | | |
$
|
529,462
|
| |
$
|
241,327
|
|
Denominator:
| | | | | | |
|
Total Shares Outstanding
| | | |
42,741,004
|
| |
21,646,614
|
|
Book Value Per Common Share
| | | |
$
|
12.39
|
| |
$
|
11.15
|
| | | | | |
|
| Book Value per Share, Excluding the Impact of Accumulated Other
Comprehensive Income (AOCI) | | | | | | |
|
Numerator:
| | | | | | |
|
Common shareholders' equity
| | | |
$
|
529,462
| | |
$
|
241,327
|
|
Accumulated other comprehensive income
| | | |
5,985
|
| |
822
|
|
Shareholders' Equity, excluding AOCI
| | | |
$
|
523,477
|
| |
$
|
240,505
|
|
Denominator:
| | | | | | |
|
Total Shares Outstanding
| | | |
42,741,004
|
| |
21,646,614
|
|
Underlying Book Value Per Common Share(1) | | | |
$
|
12.25
|
| |
$
|
11.11
|
| (1) |
|
Underlying book value per common share is a non-GAAP financial
measure and is reconciled above to book value per common share,
the most directly comparable GAAP measure. Additional information
regarding non-GAAP financial measures presented in this press
release can be found in the "Definitions of Non-GAAP Measures"
section, below.
|
| |
|
Quarterly Cash Dividend
The Company today announced that its Board of Directors declared a cash
dividend of $0.06 per share of common stock outstanding, payable in cash
on August 28, 2017 to shareholders of record on August 21, 2017.
Definitions of Non-GAAP Measures
We believe that investors' understanding of the Company's performance is
enhanced by our disclosure of the following non-GAAP measures. Our
methods for calculating these measures may differ from those used by
other companies and therefore comparability may be limited.
Combined ratio excluding the effects of current year catastrophe
losses, reserve development, and ceding commission income earned
(underlying combined ratio) is a non-GAAP ratio, which is computed
by subtracting the effect of current year catastrophe losses, prior year
development and ceding commission income earned related to our quota
share reinsurance agreement from the combined ratio. We believe that
this ratio is useful to investors and it is used by management to reveal
the trends in our business that may be obscured by current year
catastrophe losses, losses from lines in run-off and prior year
development. Current year catastrophe losses cause our loss trends to
vary significantly between periods as a result of their incidence of
occurrence and magnitude, and can have a significant impact on the
combined ratio. Prior year development is caused by unexpected loss
development on historical reserves. Ceding commission income compensates
the Company for expenses it incurs in generating the premium ceded under
our quota share reinsurance agreement. We believe it is useful for
investors to evaluate these components separately and in the aggregate
when reviewing our performance. The most direct comparable GAAP measure
is the combined ratio. The underlying combined ratio should not be
considered a substitute for the combined ratio and does not reflect the
overall profitability of our business.
Net Loss and LAE excluding the effects of current year catastrophe
losses and reserve development (underlying Loss and LAE) is a
non-GAAP measure which is computed by subtracting current year
catastrophe losses and prior year reserve development from Loss and LAE.
We use underlying loss and LAE figures to analyze our loss trends that
may be impacted by current year catastrophe losses and prior year
development on our reserves. As discussed previously, these two items
can have a significant impact on our loss trend in a given period. The
most direct comparable GAAP measure is net loss and LAE. The underlying
loss and LAE measure should not be considered a substitute for net
losses and LAE and does not reflect the overall profitability of our
business.
Net Operating Expense excluding the effects of ceding commission
income earned, merger expenses, and amortization of intangible assets
(underlying expense) is a non-GAAP measure which is computed by
subtracting ceding income earned related to our quota share reinsurance
agreement, merger expenses and amortization from operating expenses.
Ceding commission income compensates the Company for expenses it incurs
in generating the premium ceded under our quota share reinsurance
agreement. Merger expenses are directly related to past mergers and are
not reflective of current period operating performance. Similarly,
amortization expense is related to the amortization of intangible assets
acquired through merger and therefore the expense does not arise through
normal operations. We believe it is useful for investors to evaluate
these components separately and in the aggregate when reviewing our
performance. The most direct comparable GAAP measure is net expense
ratio. The underlying expense measure should not be considered a
substitute for the net expense ratio and does not reflect the overall
profitability of our business.
Book value per share, excluding the impact of accumulated other
comprehensive income (underlying book value per share), is a ratio
that uses a non-GAAP measure. It is calculated by dividing common
shareholders' equity after excluding accumulated other comprehensive
income by total common shares outstanding plus dilutive potential common
shares outstanding. We use the trend in book value per common share,
excluding the impact of accumulated other comprehensive income, in
conjunction with book value per common share to identify and analyze the
change in net worth attributable to management efforts between periods.
We believe the non-GAAP ratio is useful to investors because it
eliminates the effect of interest rates that can fluctuate significantly
from period to period and are generally driven by economic and financial
factors which are not influenced by management. Book value per common
share is the most directly comparable GAAP measure. Book value per
common share, excluding the impact of accumulated other comprehensive
income, should not be considered a substitute for book value per common
share, and does not reflect the recorded net worth of our business.
|
|
Conference Call Details |
|
|
Date and Time: |
| August 9, 2017 - 9:00 A.M. ET |
|
|
Participant Dial-In: | |
(United States): 877-407-8829
|
| |
(International): 201-493-6724
|
|
|
Webcast: | |
To listen to the live webcast, please go to www.upcinsurance.com
(Investor Relations) and click on the conference call link, or go
to: http://upcinsurance.equisolvewebcast.com/q2-2017 |
| |
|
About UPC Insurance
Founded in 1999, UPC Insurance is an insurance holding company that
sources, writes and services residential property and casualty insurance
policies using a network of independent agents and a group of wholly
owned insurance subsidiaries. The Company currently writes policies in
Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New
Jersey, New York, North Carolina, Rhode Island, South Carolina and
Texas, and is licensed to write in Alabama, Delaware, Maryland,
Mississippi, New Hampshire, and Virginia. UPC Insurance also has a
commercial residential product in Florida. The Company’s commercial
presence was further expanded by the merger with Florida’s largest
commercial property writer, American Coastal Insurance Company. From its
headquarters in St. Petersburg, UPC Insurance's team of dedicated
professionals manages a completely integrated insurance company,
including sales, underwriting, customer service and claims. UPC
Insurance is committed to financial stability and solvency.
Forward-Looking Statements
Statements in this press release, the conference call identified
above, and otherwise, that are not historical facts are “forward-looking
statements” that anticipate results based on our estimates, assumptions
and plans that are subject to uncertainty.These statements are
made subject to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements do not
relate strictly to historical or current facts and may be identified by
their use of words such as “may,” “will,” “expect,” "endeavor,"
"project," “believe,” “anticipate,” “intend,” “could,” “would,”
“estimate,” or “continue” or the negative variations thereof or
comparable terminology are intended to identify forward-looking
statements.We believe these statements are based on reasonable
estimates, assumptions and plans. However, if the estimates, assumptions
or plans underlying the forward-looking statements prove inaccurate or
if other risks or uncertainties arise, actual results could differ
materially from those communicated in these forward-looking statements.
Factors that could cause actual results to differ materially from those
expressed in, or implied by, the forward-looking statements may be found
in our filings with the U.S. Securities and Exchange Commission,
including the “Risk Factors” section in our most recent Annual Report on
Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking
statements speak only as of the date on which they are made, and, except
as required by applicable law, we undertake no obligation to update or
revise any forward-looking statement.
|
|
|
| |
| |
| Consolidated Statements of Comprehensive Income |
In thousands, except share and per share amounts |
| | | | | |
|
| | | | Three Months Ended | | Six Months Ended |
| | | | June 30, | | June 30, |
| | | | 2017 |
| 2016 | | 2017 |
| 2016 |
|
REVENUE:
| | | | | | | | | | |
|
Gross premiums written
| | | |
$
|
352,347
| | |
$
|
210,756
| | |
$
|
521,189
| | |
$
|
346,712
| |
|
Increase in gross unearned premiums
| | | |
(90,763
|
)
| |
(46,171
|
)
| |
(77,540
|
)
| |
(35,625
|
)
|
|
Gross premiums earned
| | | |
261,584
| | |
164,585
| | |
443,649
| | |
311,087
| |
|
Ceded premiums earned
| | | |
(101,966
|
)
| |
(50,406
|
)
| |
(176,848
|
)
| |
(95,538
|
)
|
|
Net premiums earned
| | | |
159,618
| | |
114,179
| | |
266,801
| | |
215,549
| |
|
Investment income
| | | |
4,637
| | |
2,727
| | |
7,588
| | |
5,123
| |
|
Net realized gains (losses)
| | | |
(132
|
)
| |
102
| | |
(483
|
)
| |
372
| |
|
Other revenue
| | | |
13,950
|
| |
3,913
|
| |
26,800
|
| |
7,438
|
|
|
Total revenues
| | | |
$
|
178,073
| | |
$
|
120,921
| | |
$
|
300,706
| | |
$
|
228,482
| |
|
EXPENSES:
| | | | | | | | | | |
|
Losses and loss adjustment expenses
| | | |
86,938
| | |
62,611
| | |
150,271
| | |
126,869
| |
|
Policy acquisition costs
| | | |
43,320
| | |
25,721
| | |
78,756
| | |
52,753
| |
|
Operating expenses
| | | |
6,257
| | |
5,814
| | |
12,129
| | |
9,768
| |
|
General and administrative expenses
| | | |
28,176
| | |
11,497
| | |
39,509
| | |
19,430
| |
|
Interest expense
| | | |
752
|
| |
116
|
| |
1,511
|
| |
191
|
|
|
Total expenses
| | | |
165,443
| | |
105,759
| | |
282,176
| | |
209,011
| |
|
Income before other income
| | | |
12,630
| | |
15,162
| | |
18,530
| | |
19,471
| |
|
Other income
| | | |
20
|
| |
48
|
| |
58
|
| |
69
|
|
|
Income before income taxes
| | | |
12,650
| | |
15,210
| | |
18,588
| | |
19,540
| |
|
Provision for income taxes
| | | |
5,393
|
| |
5,369
|
| |
7,432
|
| |
6,748
|
|
|
Net income
| | | |
$
|
7,257
|
| |
$
|
9,841
|
| |
$
|
11,156
|
| |
$
|
12,792
|
|
|
OTHER COMPREHENSIVE INCOME:
| | | | | | | | | | |
|
Change in net unrealized gains on investments
| | | |
4,106
| | |
7,420
| | |
7,837
| | |
13,800
| |
|
Reclassification adjustment for net realized investment losses
(gains)
| | | |
132
| | |
(102
|
)
| |
483
| | |
(372
|
)
|
|
Income tax expense related to items of other comprehensive income
| | | |
(1,615
|
)
| |
(2,713
|
)
| |
(3,157
|
)
| |
(5,074
|
)
|
|
Total comprehensive income
| | | |
$
|
9,880
|
| |
$
|
14,446
|
| |
$
|
16,319
|
| |
$
|
21,146
|
|
| | | | | | | | | |
|
|
Weighted average shares outstanding
| | | | | | | | | | |
|
Basic
| | | |
41,799,041
|
| |
21,423,739
|
| |
31,691,267
|
| |
21,385,220
|
|
|
Diluted
| | | |
42,028,013
|
| |
21,631,077
|
| |
31,914,559
|
| |
21,584,287
|
|
| | | | | | | | | |
|
|
Earnings per share
| | | | | | | | | | |
|
Basic
| | | |
$
|
0.17
|
| |
$
|
0.46
|
| |
$
|
0.35
|
| |
$
|
0.60
|
|
|
Diluted
| | | |
$
|
0.17
|
| |
$
|
0.45
|
| |
$
|
0.35
|
| |
$
|
0.59
|
|
| | | | | | | | | |
|
|
Dividends declared per share
| | | |
$
|
0.06
|
| |
$
|
0.06
|
| |
$
|
0.12
|
| |
$
|
0.11
|
|
| | | | | | | | | | | | | | | | | |
|
|
|
|
| |
| |
| Consolidated Balance Sheets |
In thousands, except share amounts |
| | | | | |
|
| | | | June 30, 2017 | | December 31,
2016 |
|
ASSETS
| | | | | | |
|
Investments available for sale, at fair value:
| | | | | | |
|
Fixed maturities
| | | |
$
|
716,183
| | |
$
|
494,516
| |
|
Equity securities
| | | |
59,431
| | |
28,398
| |
|
Other investments
| | | |
7,848
|
| |
5,733
|
|
|
Total investments
| | | |
$
|
783,462
|
| |
$
|
528,647
|
|
|
Cash and cash equivalents
| | | |
254,171
| | |
150,688
| |
|
Accrued investment income
| | | |
5,142
| | |
3,735
| |
|
Property and equipment, net
| | | |
19,623
| | |
17,860
| |
|
Premiums receivable, net
| | | |
93,401
| | |
38,883
| |
|
Reinsurance recoverable on paid and unpaid losses
| | | |
69,824
| | |
24,028
| |
|
Prepaid reinsurance premiums
| | | |
364,156
| | |
132,564
| |
| Goodwill | | | |
59,679
| | |
14,254
| |
|
Deferred policy acquisition costs
| | | |
94,865
| | |
65,473
| |
|
Intangible assets
| | | |
64,948
| | |
12,371
| |
|
Other assets
| | | |
12,000
|
| |
11,183
|
|
|
Total Assets
| | | |
$
|
1,821,271
|
| |
$
|
999,686
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | | |
|
Liabilities:
| | | | | | |
|
Unpaid losses and loss adjustment expenses
| | | |
$
|
204,694
| | |
$
|
140,855
| |
|
Unearned premiums
| | | |
578,587
| | |
372,223
| |
|
Reinsurance payable
| | | |
332,011
| | |
99,891
| |
|
Other liabilities
| | | |
122,752
| | |
91,215
| |
|
Notes payable
| | | |
53,765
|
| |
54,175
|
|
|
Total Liabilities
| | | |
$
|
1,291,809
|
| |
$
|
758,359
|
|
|
Commitments and contingencies
| | | | | | |
|
Stockholders' Equity:
| | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;
none issued or outstanding
| | | |
—
| | |
—
| |
|
Common stock, $0.0001 par value; 50,000,000 shares authorized;
42,953,087 and 21,858,697 issued; 42,741,004 and 21,646,614
outstanding, respectively
| | | |
4
| | |
2
| |
|
Additional paid-in capital
| | | |
375,029
| | |
99,353
| |
| Treasury shares, at cost; 212,083 shares
| | | |
(431
|
)
| |
(431
|
)
|
|
Accumulated other comprehensive income
| | | |
5,985
| | |
822
| |
|
Retained earnings
| | | |
148,875
|
| |
141,581
|
|
|
Total Stockholders' Equity
| | | |
$
|
529,462
|
| |
$
|
241,327
|
|
|
Total Liabilities and Stockholders' Equity
| | | |
$
|
1,821,271
|
| |
$
|
999,686
|
|
| | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808006430/en/
United Insurance Holdings Corp.
Jessica Strathman, (727)
895-7737
SEC Reporting Manager
jstrathman@upcinsurance.com
or
Investor
Relations:
The Equity Group
Adam Prior, (212)
836-9606
Senior Vice-President
aprior@equityny.com
Source: United Insurance Holdings Corp.